There have been sharp declines in the cryptocurrency market in the last week. Ethereum 
$2,736.07Ripple 
$1.92BinanceCoin 
$819.73 (BNB) and Cardano 
$0.400326The decline of over 12% significantly reduced investors’ risk appetite. However, although the picture seems so dark, some indicators consistent with past cycles point to the end of the downward trend. In particular, data and technical indicators measuring market psychology lay the groundwork for a possible recovery.
While Fear and Greed Index Sounds Alarm, Hope Rises
The closely followed Fear and Greed Index fell to 10, its lowest level of the year, indicating that fear has peaked in the market. But historical data, especially Bitcoin 
$84,181.30It reveals that past rallies of ‘s past rallies have seen such periods of extreme fear just before rallies. As a matter of fact, a few weeks before Bitcoin broke its record in May this year, the index was again in the “extreme fear” zone.
Similarly, if the Relative Strength Index (RSI) of the total crypto market value falls to the level of 24, it indicates that the market has entered the oversold zone. It is thought that the negative divergence that has been ongoing since July has come to an end. Technical analysts evaluate that a “double bottom” formation may occur in Bitcoin and altcoins and this may pave the way for a strong recovery.
Futures Clearing and Leveraging Relief Relieves the Market
It seems that the clearing process in the markets is slowly being completed. According to CoinGlass data, the open position size in futures decreased from 320 billion dollars to 123 billion dollars. This retreat shows that investors are turning to a healthier market structure by using less leverage. The fact that liquidations since October 10 have exceeded 40 billion dollars confirms that weak positions have been largely eliminated from the market.
This decrease in leveraged trading volume means more stable price movements in the long run. A similar process occurred after the LUNA collapse in 2022, and the market witnessed a strong recovery within a few months. From this perspective, it is considered that the current liquidation cycle may open the door to a new upward phase.
On the other hand, market dynamics are not limited to technical indicators only. The increasing likelihood of the Fed’s interest rate cut for 2025, the growth in the global M2 money supply, and especially the accelerating process in altcoin ETF applications indicate that there may be a re-capital flow to risky assets. Last week, the US Securities and Exchange Commission (SEC)’s evaluation of a new Solana ETF application was one of the current developments that strengthened this expectation.
In summary, although the general outlook is still cautious, both technical indicators and macroeconomic signals indicate that a turning point is approaching in the market. Although it is too early to say that the downtrend is completely over, the possibility of a recovery after periods of extreme fear, similar to past cycles, is getting stronger. However, it is of great importance for investors to take steps without forgetting that short-term volatility may continue.
